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CREW Hits Frist With FEC Complaint

A liberal watchdog group filed a complaint against Senate Majority Leader Bill Frist (R-Tenn.) on Monday, alleging that Frist didn’t properly disclose a $1.4 million loan he took out for his campaign committees almost five years ago.

The group, Citizens for Responsibility and Ethics in Washington, accused Frist of intentionally trying to mask the debt from the loan by reporting it to the Federal Election Commission in filings from his 1994 campaign, as opposed to both the 1994 and 2000 election committees.

Frist’s top political operative dismissed the complaint, which was filed with the FEC, as politically driven and incorrect in its primary assertion, noting that the loan in question was reported to the FEC in early 2001 and the commission has not raised a question about it in the intervening years.

“We have filed consistently with every FEC regulation,” said Linus Catignani, Frist’s top fundraiser. “If they had a question, I assumed they would have asked by now.”

At issue are a series of transactions that Frist’s campaign committees made shortly after he easily won re-election to his second and final Senate term in November 2000. The committee’s finances have been widely reported and CREW pounced on the most recent report, in the Atlanta Journal-Constitution, which detailed the loan process.

Frist had lent his 1994 campaign more than $6.6 million of his own money, and by the end of 2000, the committee had not repaid Frist personally for $1.2 million of that total. But his 2000 campaign committee, Frist 2000 Inc., was unable to reimburse Frist, because the committee had spent more than $6.1 million that cycle and also had lost a substantial amount of cash when it plunked $1 million into a stock market index fund.

So the old 1994 committee, called Bill Frist for Senate, took out a $1.44 million loan, according to FEC filings. And Frist 2000 essentially acted as a co-signer on the loan, assuming the debt if the old committee failed to pay it.

On Nov. 28, 2000, Frist personally received a check for $1.25 million and the remainder of the cash from the loan paid off a smaller loan still outstanding from the 1994 campaign.

Frist’s political operatives included the loan documents in FEC filings for Frist’s 1994 committee, detailing that Frist 2000 was “secondarily liable.” But documents filed for Frist’s 2000 committee didn’t report the loan.

CREW Executive Director Melanie Sloan, a former House and Senate Democratic staffer, said Frist “was clearly trying to hide the fact that his 2000 campaign was over $1 million in debt.”

Intentionally filing wrong information with the FEC is a violation.

In June 2001, Frist closed down the 1994 committee, indicating in a hand-written note that the $1.44 million loan with First Union was “transferred to Frist 2000.”

The 2000 committee then took out another loan, this one for $360,000, and used that money — as well as the money left in the campaign account — to pay off the original bank loan by the end of June 2001.

For the past several years, Frist 2000 has made mostly interest payments on the $360,000 loan. As of the committee’s most recent FEC filing, March 30, Frist’s old campaign still owed $349,000 for that loan. It had about $290,000 in cash on hand.

Catignani said the report for the second quarter of this year would show a similar level of debt.

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